Paying PAYE on time

From May 2010 you may have to pay a penalty if you do not pay the PAYE due each month, on time and in full.
What if I do not pay on time?

It is intended to implement the late payments penalties for payment due from May 2010. From then on, you may have to pay penalties if you make more then one PAYE payment late. The new penalties apply to all employers.
How will the new penalties work?

The penalties will be a percentage of the amount you pay late. They will start at 1% and increase to 4% depending on the number of late payments in a year.

There are also penalties of 5% if any of the PAYE due is still not paid after 6 months; and again after 12 months.

You will not get a penalty if you have a reasonable excuse for being late once in the tax year (unless the payment is more then 6 months overdue). You can also appeal against the penalty if you disagree with HMRC’s decision to impose it, or if you believe the amount of the penalty is wrong.

When should I pay by?

The PAYE payment deadlines are:

22nd of the month for your cleared electronic payment to reach HMRC’s account.

19th of the month if you send the payment by post (or 17th of the month if you are a large employer). If these dates fall on a weekend of a bank holiday your payment needs to be received on the last bank working day before the 19th or 22nd. If the amounts you pay are likely to average less then £1,500 per month over the year, you can pay quarterly.

What if I can’t pay what I owe?

You should tell HMRC as soon as you can, if you think you will have difficulty paying, otherwise they may start recovery action.

Please contact the dedicated Business Payment Support Service (BPSS) on 0845 302 1435 – Monday to Friday 8.00 am to 8.00 pm; and Saturday and Sunday 8.00 am to 4.00 pm.

HMRC will need the following information if you call the BPSS:

Your tax reference number

Details of the PAYE amount that you will have trouble paying

Basic details of your business’s income and outgoings.

But please note that the BPSS is intended for new enquiries only.

If HMRC agree a payment arrangement with you, you will not be charged any penalties for the period of your agreement. Any penalties already charged can also be included in the payment arrangement.
What if I do not have anything to pay?

If you do not have anything to pay for a month of quarter, its important HMRC know two. This will stop any unnecessary reminders. You can do this by:

Completing the form on-line. You can find the form at www.hmrc.gov.uk/payinghmrc/paye-nil.htm
sending a signed payslip for the correct month or quarter marked ‘NIL due’, if you still receive a payslip booklet

Phoning 0845 366 7816 and providing your Accounts Office reference number and the details of the month or quarter of which no payment is due.

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